About this Show

Your Money

News/Business. Ali Velshi. CNN anchors break down the financial news of the week. New.

NETWORK
CNN

DURATION
01:00:00

RATING

SCANNED IN
San Francisco, CA, USA

SOURCE
Comcast Cable

TUNER
Virtual Ch. 759 (CNN HD)

VIDEO CODEC
mpeg2video

AUDIO CODEC
ac3

PIXEL WIDTH
1920

PIXEL HEIGHT
1080

TOPIC FREQUENCY

Us 9, Washington 7, United States 3, S&p 3, Greg 3, U.s. 3, Alabama 3, Christine 2, Ben Bernanke 2, Officemax 2, Newton 2, Geico 2, Michael Jordan 2, Blackberry 2, Slimful 2, Newtown 2, California 2, Florida 2, Canada 2, Rahm Emanuel 2,
Borrow a DVD
of this show
  CNN    Your Money    News/Business. Ali Velshi. CNN anchors  
   break down the financial news of the week. New.  

    February 3, 2013
    12:00 - 1:00pm PST  

12:00pm
choked up talking about it because it meant a whole lot to me. it still matters a whole lot. >> the most satisfying thing at tech shop is simply seeing people come in here to this new environment and seeing them light up the first time they come up with a project. i'll be out in the lobby and i like to ask people what they make. somebody will come out and they'll have all their gear all bundled up and i'll say, hey, did you have fun today? what did you make? they'll say, oh, let me show you. and they'll unpack their whole kit just to get that little piece of metal that they machined out. you know, to show me. look what i made. it's -- that's my favorite part. the good thing is that from the very beginning, i did want to do it to empower people and it's growing so quickly now that in ten years, we could have a million members. innovative. it's pretty cool. i'm a very lucky guy.
12:01pm
lucky with my family, lucky with my business. i constantly feel that i'm just very lucky to have the opportunity to build this company and reach and touch so many people's lives. it's not very many people get to do that. >> he is now determined to open a tech shop in every major city in the country. to hope that new ideas and inventions will come of it, or at lot of fun. newton is not only achieving his own dream, he is giving others the power to achieve theirs. that's why we put him on "the next list." for more on agency change, check us out online, like us on facebook. i'm dr. sanjay gupta. hope to see you back here next week. more jobs in january. a bull run on wall street and a rebound in housing all that should signal economic recovery is on the way, but with
12:02pm
washington dysfunction standing in the way, is that a safe bet for you and your money. i'm christine romans and this is "your money." alli velshi is off this week. 107,000 new jobs added in january and unemployment rate rising. there's room for improvement, but it continues a trend now 28 months strong. a trend of more jobs added every month. stocks are soaring with the s&p 500, a good example of what americans are holding in their 401(k)s and iras crossing the 15 threshold for the first time since the dark days of the recession back in 2008 and housing, the very thing that helped fuel that recession, well, it looks like it's making a comeback. 2012 was the best year in real estate for five years. home prices jumped 5.5% year over year in november. that's the biggest gain in six years and with interest rates and historic lows, you can get 3.5% on a fixed rate mortgage.
12:03pm
home prices will go up. not all positive. gross domestic product shrank for the first time in three years. coming down ever so slightly by 0.1% in the fourth quarter of 2012. so, with stocks and housing looking up, why should gdp come down? blame it on washington. fiscal cliffs, taxes, spending, issues hugely important to economic certainty and push government and businesses to hold back on their spending until the dust settles in washington. the ownp the only problem with that is that the dust may never settle in the nation's capital. >> if the white house spent as much time trying to fix the economy as it did claiming it was fixed and then finding excuses and scapegoats when its premature announcements turn out to be false, i would suspect the economy is doing better than it is today. >> austin is a key member and
12:04pm
today a professor of economics at the university of chicago booth coolal school of business. in fairness, this white house spends a lot of time blaming republicans for economic problems. has it gone overboard? perhaps too much politics and not enough policy because we did have an election. >> you know, i thought that was kind of a weird, cheap shot to come from the minority leader. i think the difference between being recovered and being in recovery is pretty different. and that is we're growing at a modest pace. we should be growing faster, but we're about the fastest growth of the advance world. but we still have a long way to go before we're back to where we were prebubble days and prerecession. i think the job's numbers, they were okay. you know, they were about what was expected. we saw over the last year, we've added a little more than 2 million jobs. that is a decent year.
12:05pm
we have to get the growth rate above 2% to see something superior to that. >> that is a consistent message from you and the white house. you talk about comparing it with the rest of the advance world and unemployment in the euro area at 11.7%. part of the world where they are tightening belts ask cutting budgets. i want to bring in greg, a chief political strategist in washington. greg, no surprise that senate majority leader has quite a different take from mitch mcconnell on an economy that is supposed to be in recovery just shrank for the first time since the recession. take a listen. >> the moral of the fourth quarter is a repudiation of the republican playbook. growth went down in the fourth quarter because of reduced government spending. at residence of the private sector has congress fought over the fiscal cliff. >> was that gdp number a repudiation of the republican playbook? >> maybe a little bit. let me tell you, christine. i think the clouds are starting
12:06pm
to lift in this city. maybe they can be embarrassed. the period between christmas and new year's was so humiliating. they look so pathetic that i think this playbook of seeking confrontation has been abandoned. we are not going to have a debt ceiling default crisis and we're not going to have a government shut down. we'll have sequester for a few months, but i think these great epic struggles that worry the markets are starting to fade as a strategic policy. >> do you think it happens, greg? >> for a while, yeah. i think on march 1 we begin at least on defense and discretionary spending. if there's enough squawking maybe by late spring, early summer it gets undone. we'll have that. still some head winds. there is this and the higher payroll tax. maybe first rate growth is a little slow but by the second half, things could be looking much better. >> this week, we moved closer to the unthinkable. the sequester that president
12:07pm
obama promised us would never happen. listen just a few months ago. >> first of all, the sequester is not something that i proposed. something that congress has proposed. it will not happen. >> i don't know, that could be the one election promise the president fails to keep. the sequester a part of the decision on march 1st. what happens if the sequester happens? >> well, in fairness, i think that clip was about that the sequester would not happen on january 1st because he was saying they would be able to reach some kind of agreement. they reached an agreement to kick things down the road. >> he didn't say january 1st. he said the sequester will not happen. okay, but go ahead. >> well, you took only a two-second clip out of a speech and press conference, which was all about -- >> it was a debate. >> a run up to january 1st. look, the reality is, we know that over the long run we've got
12:08pm
to bring the fiscal position more in line. and the debate is about how much will be of cuts to discretionary, how much on entitlements and how much new revenues. that debate will continue and so the biggest problem of the sequester was just that it was going to be sudden, not that the magnitude was as -- was the thing that was scary. so, i actually think something like the sequester is likely. that we're going to be in a period of government retrenchment. i don't think there is any way around that. >> that debate, what you were hearing was sound from the president and challenger mitt romney. foreign policy debate about defense spending cuts in the sequester happening at the beginning of the year. so, then, if it's going to happen, just not at the beginning of the year. what is it going to look like and what is it going to do to the economy? >> i think they're going to be, we are in a period of retrenchment at the state and local and federal level. the government is shrinking. had revenues are low. every pressure is going in that
12:09pm
way. i think it probably will not end up looking like this just automatic across the board cuts. but you're likely to have at the least very hard freezes on all forms of spending and nominal doct dollars. so nobody can spend more than they spent in the last year, even if there weren't inflation. >> greg? >> i would add ironically the budget deficit is falling. certainly as a percentage of gdp and we'll get on tuesday, i think, from the congressional budget office new budget figures that show, in fact, that the deficit is dropping and dropping pretty significantly. >> guys, one last question to each of you. you have been watching the markets for so long. we have near records for stocks. gdp that shrank, jobs growth that is okay. why is the market so excited about what's happening either corporate profit or the economy? >> you know, that is a good question. i think a lot of people have
12:10pm
been asking it. i think we have been in the context of record corporate profits. the fundamentals of the stock price. if you added up all the money that the market forecasts that the company will make in the future, that's how much the stock should be worth. so, record corporate profits in some sense should have been reflected in higher prices already. and now, the only reason they weren't, i think, is because people were afraid that washington might blow it up or that there might be some worldwide. as those fears have eased, i think the stock market has eased into where it would have been otherwise already. >> in the fed, greg? >> two words, christine. ben bernanke. i think he made it very clear that the feds will stay accommodative until we're out of the woods. we're not certain we're out of the woods quite yet. >> have a great weekend, gentlemen. >> you bet. one bright spot in housing in the recovery is housing. prices, sales, builder
12:11pm
confidence have been rising steadily over the past year and combine that with historically low interest rates and now seems like a perfect time to buy. my next guest says that is actually a terrible idea. robert schumer, arguably the smartest man on housing, after the break. [ woman ] ring. ring. progresso. i just served my mother-in-law your chicken noodle soup but she loved it so much... i told her it was homemade. everyone tells a little white lie now and then. but now she wants my recipe [ clears his throat ] [ softly ] she's right behind me isn't she? [ male announcer ] progresso. you gotta taste this soup. i'm up next, but now i'm singing the heartburn blues.
12:12pm
hold on, prilosec isn't for fast relief. cue up alka-seltzer. it stops heartburn fast. ♪ oh what a relief it is!
12:13pm
to tell real people about our new 15 under $15 menu! oh my goodness... oh my gosh, this looks amazing... [ male announcer ] 15 entrees under $15! it's our new maine stays! seafood, chicken, and more! ooh! the tilapia with roasted vegetables. i'm actually looking at the wood grilled chicken with portobello wine sauce. that pork chop was great. no more fast food friday's. we're going to go to red lobster...
12:14pm
[ male announcer ] come try our new menu and sea food differently. and introducing 7 lunch choices for just $7.99! salad, sandwiches and more. the single largest investment that most of us will make. a house. the decision to buy or sell is not easy. past several years are hard on homeowners. steady declines caused many to get out entirely but the picture changing in the last year or so. since january of 2012, prices have gone up more than 6% nationwide, according to s&p k. schiller index. the gold standard for measuring the health of the housing market. the shrichiller in the case schiller and many, many other great books. he is famous for calling the end of the dotcom bubble and housing bubble. you know, robert, you can't argue with the numbers over the last year.
12:15pm
mortgage rates are at historic lows. but professor, not ready to jump on this whole housing is in a big roaring recovery band wagon, are you? >> no. because, i mean, i see that they're up. they will probably go up. good chance they'll go up for some time longer. but it's not as clear as people would say. the media seem to be jumping on to this as a transformation. >> we haven't had anything good to say in seven years, professor. give me a break. i just want to report something that is going up. you can understand why so many people are saying my home value is not going down any more and that psychologically means so much. put it in perspective for me then. >> well, we still have very, we have seen a recovering in housing starts and permits but still near record low levels. this is an uptick half of this is seasonal because it occurred during the second half of 2012.
12:16pm
the last two months were actually down. nobody seems to notice that. they're up on a seasonally adjusted basis. the seasonal factor has been getting stronger. it's not clear. it does look good, but i'm also looking for the longer horizon which i think that people who buy houses are focused on. >> you, sir, are the -- >> it's very hard to predict these things. >> you, sir, on the one hand, on the one hand economist. we want to look at that one hand. we have green arrows. part of the problem, professor, you argued it's psychological. people saw what happened in 2008. too scared to buy a house after the collapse. do you think the american dream of owning a home has changed in some fundamental way in the past few years? >> that's -- it's interesting to consider that. it seems like there has been a change. most new household formations have been rentals or most new, the increase in homes, in homes
12:17pm
has been entirely explained by renta rentals, not purchases. the home ownership rate has fallen from 69% to 65.5%. it's not -- the recent studies have not given any economic explanation for that. it shouldn't be going down. mortgage rates are at near record lows. yet, people are pulling out of the homeownership. >> we know about half of americans, according to another study this week, are one financial calamity away from a total financial wipeout. people don't have the savings, too, to go after -- i'm not actually surprised that homeownerships are declining. americans don't have three months saved and can't become a new homeowner under those circumstances. very great to see you, have a great weekend, sir. coming up, the richest man in america wants washington to fix this. >> i'd love to see us solve illegal immigration and a
12:18pm
tougher problem. the talent immigration has kind of been held hostage to that broader problem. >> bill gates and why america needs to open its gates or risk damaging this country's competitiveness. so...how'd it go? well, dad, i spent my childhood living with monks learning the art of dealmaking. you've mastered monkey-style kung fu? no. priceline is different now. you don't even have to bid. master hahn taught you all that? oh, and he says to say (translated from cantonese) "you still owe him five bucks." your accent needs a little work. starts with arthritis pain and a choice. take tylenol or take aleve, the #1 recommended pain reliever by orthopedic doctors. just two aleve can keep pain away all day. back to the news. to help protect your eye health as you age... would you take it? well, there is.
12:19pm
[ male announcer ] it's called ocuvite. a vitamin totally dedicated to your eyes, from the eye care experts at bausch + lomb. as you age, eyes can lose vital nutrients. ocuvite helps replenish key eye nutrients. ocuvite has a unique formula not found in your multivitamin to help protect your eye health. now that's a pill worth taking. [ male announcer ] ocuvite. help protect your eye health. officewith an online package new colincluding: domain name,y! website builder with five pages and basic email just $49.99! that's up to 76 percent below online providers and only at officemax stores!
12:20pm
thyou eat less...ing weiyou lose weight.et. it's a great plan... until you get hungry. that's the time to take slimful. one tasty 90-calorie slimful and a glass of water satisfies hunger for hours making it easier to eat smaller meals, and resist snacking. your friends might think you found the secret to losing weight. but it's no secret... it's slimful. eating less is a beautiful thing.
12:21pm
i saw something in washington this week that made me do a double take. so rare that i thought my eyes were playing tricks. you know what it was? bipartisan. bipartisan in washington on the issue of immigration reform in this case. eight senators four from each party stepped forward to offer a framework for overhauling the immigration system. >> i don't think i have to remind anyone. the last major attempt was over six years ago. now, we will commit the remaining resources needed to secure the border and streamline our current immigration system and create a path to citizenship for those here illegally. >> a day later, the president threw his full support behind the effort. >> i believe we are finally at a
12:22pm
moment where comprehensive immigration reform is within our gras. but i promise you this, the closer we get, the more emotional this debate is going to become. >> the president's right. immigration is an issue that inflames passions. it has huge ramifications for the u.s. economy. that's why the richest man in america has something to say on this subject. this week i sat down with bill gates. he said america is throwing away talent by kicking educated immigrants who create jobs for the rest of us out of the country. >> the united states has benefitted from the fact that capable people whether you call that smart or whatever word you use have wanted to come to the united states. so whether it's south america, asia, europe, we have been a magnet for talent. that's partly why with higher defense budget, medical budget why we can continue to be such
12:23pm
an exemplar. partly why our universities are so strong. yet our immigration system makes it very hard for those people to come in. so, you know, if somebody is being offered a job here for over $100,000. there's other jobs created around that job. you don't want to discourage a company from having to put that job -- >> do we discourage them? >> absolutely. >> how? >> you can be a student at uc berkeley and get this wonderful education, microsoft offers use a job for over $100,000 a year and we have to say, if the country will keep you. most of those students are told they can't stay. get out of the united states. >> so, they take the education and go start a company somewhere else. >> they have to. they have to go to canada or india or somewhere else. no other country does it that way. and most of the immigration proposals do look at those students and say, yes. let's keep them here. >> you see consensus on that then, you think.
12:24pm
>> yes, although, you know, the broad issue of how do we make sure in these technology areas where we're so short that we both invest domestically and improving education while we allow these to come in. it will be interesting how this shapes up. >> we have to grow talent. >> it's more promising now than it has been. microsoft even made a proposal, which may or may not be adopted. the fee for these visas be increased and that go back into science and math education. so, it's great to see this problem the u.s. has getting on to the front burner may, we may see progress here because on both sides of the aisle, people are saying some of the right things. the numbers here are not anywhere comparable to the illegal immigration. i would love to see us solve illegal immigration and a
12:25pm
tougher problem. the high talent immigration has kind of been held hostage to that broader problem. >> you think they'll fix both? >> well, the ideal is to fix both. if you could fix neither, you would want to at least go and fix the high skills thing. but for the first time in many years, i see a real prospect that they'll actually fix both. >> if they fix either the talent part of it or the whole immigration problem, something that unleashes some job growth in the american economy? >> it will be helpful. we're taking this advantage that we have and not throwing it away. >> check out more with bill gates on this week's fareed zakaria gps. new name, new opaerating system, new phone, but will it be enough to save blackberry? find out. a new belt. some nylons. and what girl wouldn't need new shoes? and with all the points i've been earning, i was able to get us a flight to our favorite climbing spot even on a holiday weekend.
12:26pm
♪ things are definitely looking up. [ male announcer ] with no blackout dates, you can use your citi thankyou points to travel whenever you want. visit citi.com/thankyoucards to apply. to travel whenever you want. all stations come over to mithis is for real this time. step seven point two one two. verify and lock. command is locked. five seconds. three, two, one. standing by for capture. the most innovative software on the planet... dragon is captured. is connecting today's leading companies to places beyond it. siemens. answers. [ construction sounds ] ♪ [ watch ticking ] [ engine revs ] come in. ♪ got the coffee. that was fast.
12:27pm
we're outta here. ♪ [ engine revs ] ♪ [ engine revs ] hey, buddy? oh, hey, flo. you want to see something cool? snapshot, from progressive. my insurance company told me not to talk to people like you. you always do what they tell you? no... try it, and see what your good driving can save you. you don't even have to switch. unless you're scared. i'm not scared, it's... you know we can still see you. no, you can't. pretty sure we can... try snapshot today -- no pressure.
12:28pm
gives you 1% cash back on all purchases, plus a 50% annual bonus. and everyone likes 50% more... [ midwestern/chicago accent ] cheddar! yeah! 50 percent more [yodeling] yodel-ay-ee-oo. 50% more flash. [ southern accent ] 50 percent more taters. that's where tots come from. [ male announcer ] the capital one cash rewards card gives you 1% cash back on every purchase plus a 50% annual bonus on the cash you earn. it's the card for people who like more cash. 50% more spy stuff. what's in your wallet? this car is too small. blackberry has suffered through falling prices and stiff competition from apple's iphone and android devices. now the company is looking for a
12:29pm
turn around. it announced the company will change its name from research in motion to blackberry. it also debuted the new blackberry 10 operating system and announced new phone models running it. but is that enough to save this company? ali velshi got his hands on a new blackberry phone and he's been test driving it for a weekp. >> no buttons. >> reporter: no buttons may not be news to you but big news for blackberry users. many of whom won't know what to make of the z10. canada's research in motion is counting on this totally virtual phone to allow it to live to fight another day. after a year-long delay and years of neglecting the onslot by apple and android-based phones, r.i.m. unveiled its mobile operating system and the first phone to run it. >> we needed to make sure that we deliver the quality that people expect from us. and frankly we got out of the noise of the holiday season, but now we have a lot of attention, as you can see.
12:30pm
it was the right call. >> reporter: as a long-time blackberry user and hard keyboard. i am a champion thumb typist and my e-mail output has been cut in half while i got used to it, but the company says the keyboard is easier to use and more intuitive than its virtual competitors. it grabs words from your device and names from your contacts and predicts in a very customized way what you're likely to type. allowing you to compose entire sentences just by clicking the complete words, which appear on the keyboard up towards the screen. all of it can be done with one hand. for those users for whom a virtual keyboard is still a nonstarter, yowlvu'll have to w until april for a model with a hard keyboard. not a single line of code is copied from blackberry's
12:31pm
existing platform. here's an interesting feature for those who use a corporate blackberry with strict company rules but also carry a separate phone for your personal use. the blackberry 10 uses something called balance. which basically allows the t device to be split so the corporate side of it can adhere to the company's rules while on the other side of the split personality you can do all of your personal business. >> this is secure. the information in them is secure. i can't take anything out of the wo workspace. when i'm on the personal side, i can remain confident that none of the tweets that i'm sending, the pictures that i'm sharing are things my company has access to. >> reporter: the two sides of the device, if you will, never cross each other. keep in mind your company has to authorize and enable this feature. ultrasecure, ultraefficient back
12:32pm
office systems allow them to dominant the corporate world. back in 2009, 20% of all smartphones globally were blackberries. today just 6%. the stock is down more than 80% in five years. the question is whether this phone can change all of that. who are you trying to steal from? iphone users or android users? >> i'm not stealing, we're winning. >> reporter: who are you trying to steal from? >> we want to win as many as we can. >> all right. mobile customers in the u.s. can expect to see new blackberry 10 models at phone retailers by the end of march. up next, boom. or bubble. stocks hovering near all-time highs. but is this market for real? find out, next. [ wind howls ]
12:33pm
[ dog barks ] ♪ ♪ [ male announcer ] something powerful is coming. ♪ see it in the fourth quarter. ♪
12:34pm
12:35pm
12:36pm
the dow just finished its best january since 1994 and the individual investor finally getting in ingame sinking $16 billion into mutual funds in the first three weeks of the year. this after yanking $150 billion out last year. it's human nature, you need convincing before you feel comfortable investing. maybe you feel emboldened by ben bernanke and the federal reserve pumping hundreds of billions of dollars into the economy. something that money manager and friend of the show peter spoofed in this cartoon. he likens it to athletes taking performance enhancing drugs. >> yes or no, did you risk stimulates to boost your central banking performance? >> yes. >> was one of those financial mbs or mortgage backed securities? >> yes. >> yes or no. >> yes or no. artificially lower interest
12:37pm
rates? >> yes. >> for a long time to continue them indefinitely? >> it's kind of clever. you may feel like the economy is healthier than the most recent gdp report indicated showing the first shrinking since the recession or looking for ways to put your money to work and stocks look cheap. look at the cnn fear and money index. we're in the extreme greed mode right now. did you miss your opportunity? let's bring in a couple people. ryan mack is the president and lee munson the founder and chief investment officer of portfolio llc. lee, let me start with you. your clients want yield. are stocks the only place right now to get real returns? >> you know, i do think that they are. i think you still are going to always have to have a balanced portfolio. stop asking the wrong questions of where we're going to get yield from and this juice that
12:38pm
people want. always a great time to have a balanced risk managed portfolio and yield not the prime driver. you have to look at absolute return. you always have to step back. why are we investing in stocks or in bonds? it has to fit your own personal situation. until we do that, i don't think anybody should be investing in anything. it will dictate exactly what kind of assets and what kind of things you should have in that and you don't have to worry about timing the market and enjoy silly things. >> right. that was all for your enjoyment, i am not making an editorial statement at all. when was the last time you were balanced? you want to take advantage of gains when you get them and make sure you have the right asset allocation, something that ryan talks about a lot. this perception that stocks are undervalued given other periods when stocks were nearing highs. what do you think is different about this time around? >> i think this time, the
12:39pm
appreciation in the market has a lot what the fed is doing and putting $85 billion a month into the economy. i think and now we're seeing the housing market start to level out and we're starting to see the deleveraging of banks finally starting to lend, again. small signs of improvement. i think this economy is almost like michael jordan when he came back from retirement the first time. he ran three championships and he was great and everybody was so used to him being the best player. when he came back he was rusty and they weren't used to him not being as good as he was. it is going to be like that for a while. i couldn't agree with lee any more. this is the time to start taking a look at your overall picture and see what your financial goals are to see if it is right for you to step into the economy. >> after this week everyone is talking about stocks and why they're there. take a look at this graphic that we made. this is showing the stages of a bull market. this bull market is nearly four years old.
12:40pm
that is long in the tooth for an old bull, but old bulls can still run. if we're in the exuberance phase of stocks right here, are we about it repeat history and trigger another comment like this one. speaking, i guess you could call them the michael jordan of monetary policy. >> how do we know when irrati irrational exuberance asset values. >> i believe that this economy, look, in the first three weeks. a lot of money come back from retail investors and a lot of people saying retail investors coming back. if you look at it, again. only for the first three weeks. sustain itself in the long run? i don't think it can be sustainable for the long run. especially if we have $11 trillion right now sitting in cash and getting 0% interest rate in money market accounts. a lot of folks have money on the sidelines and we have skipticism about how long this is going to continue. i'm telling folks, look, if we have $10,000 in credit card debt, this is not your time to get into the economy.
12:41pm
>> in the stock market, you mean. >> if you have a financial goal buying a house or starting a business, this is not the time to use the stock market as a gamble. >> that's a good point. who should be in stocks and how you should be weighed and what your individual goals are, what lee was talking about and who shouldn't be looking at stocks near record high and say, oh, now is my time to get in. >> absolutely. right now we have to look at what the individual goals are, again. the credit right now, if we still have a lot of -- we have two americas out here. individuals out here are not investing in the stock market. they don't care about $14,000 on the dow because they're worried about check to check and day to day. we have to understand that in middle america right now are still struggling and still starting to move forward and asset appreciation does not equal economic growth. we have to understand there is a difference between the two. until we start seeing that 1 and $1.5 trillion of capital coming off the sidelines. we're not going to see true economic growth come back and see the upside to that gdp.
12:42pm
it's great that we're seeing a strong economy in terms of stronger stock market, but i would rather see the stronger stock market come behind it. >> your thoughts for the year, where we're going for the year in the economy and the market. >> well, i think that we're going to see an all-time high this year. i'll be bold. i think we can see $15.75 on the s&p. when we were talking about the america and i think people have to remember one thing. if you have money out there a year from now that you're going to need for an alaskan cruise and you need to keep that cash there. don't, don't make the mistake of cashing out your entire portfolio just because you're worried about a crash. you have some sort of way of accounting for something that you need next year versus totally cashing out. i see that happen with retired baby boomers all the time. i think the market goes higher and interest rates are going to go no place and i think if you don't have a plan, i keep telling people, this is the perfect time to surrender to a financial plan. you have it in.
12:43pm
you have the fundamentals and uncle ben pumping billions into the system. never been a better time to get your act together. >> uncle ben and it's not the ice cream, it's the fed chief. so nice to see both of you today. come back again soon. we'll talk about it again. what happens when the market and your morales conflict. pension funds and other investors coming under pressure to devest their earnings. their profits, their sales and take a look, next. to the best vacation spot on earth.
12:44pm
(all) the gulf! it doesn't matter which of our great states folks visit. mississippi, alabama, louisiana or florida, they're gonna love it. shaul, your alabama hospitality is incredible. thanks, karen. love your mississippi outdoors. i vote for your florida beaches, dawn. bill, this louisiana seafood is delicious. we're having such a great year on the gulf, we've decided to put aside our rivalry. now is the perfect time to visit anyone of our states. the beaches and waters couldn't be more beautiful. take a boat ride, go fishing or just lay in the sun. we've got coastline to explore and wildlife to photograph. and there's world class dining with our world famous seafood. so for a great vacation this year, come to the gulf. its all fabulous but i give florida the edge. right after mississippi. you mean alabama. say louisiana or there's no dessert. this invitation is brought to you by bp and all of us who call the gulf home. to find you a great deal, even if it's not with us.
12:45pm
[ ding ] oh, that's helpful! well, our company does that, too. actually, we invented that. it's like a sauna in here. helping you save, even if it's not with us -- now, that's progressive! call or click today. no mas pantalones! when she's happy, she writes about bunnies. when she's sad, she writes about goblins. [ balloon pops, goblin growling ] she wrote a lot about goblins after getting burned in the market. but she found someone to talk to and gained the confidence to start investing again. ♪ and that's what you call a storybook ending. it's not rocket science. it's just common sense. from td ameritrade.
12:46pm
[heart beating] [heartbeat continues] [heartbeat, music playing louder] ♪ i'm feeling better since you know me... ♪ announcer: this song was created with heartbeats of children in need. find out how it can help frontline health workers bring hope to millions of children at everybeatmatters.org. gun and ammunition sales have skyrocketed since the sandy hook. limiting three boxes per day per customer. background checks for gun purchases the best way to check sales. the background checks have exploded. eight of the ten days with the highest number of background checks have occurred since the december 14th shooting in newtown. the gun business is booming even
12:47pm
as public pension funds and other big corporate investors face growing pressure to devest their gun holdings. the question, will it make any difference to gun company's bottom line. ending apartide in south africa. putting pressure on the tobacco industry. and after the massacre in newtown, some want to do the same with gun violence. you think this is as big as apartide and as big as devesting out of tobacco companies. >> i think it will be just as big because people feel this is a threat to their lives now. a threat to their children. >> reporter: in philadelphia, mayor michael nutter released rules for retailers like walmart if they want to get pension investment money. mayor rahm emanuel is urging to cut line to credit to gun
12:48pm
companies. pressuring 12 big fund managers to dump their investments in gun stocks. >> we're telling them, you have to get out of these investments and do it now. this is a break point in american history. >> reporter: one of the funds, tiger global, says it has no position in any gun company and has no intention of owning one. another fund says it will sell freedom group, the maker of the bushmaster rifle used in the newtown shooting. in the days following that massacre, california public school teachers learned their pension fund invested in freedom group. >> i was devastated when we realized that we had this investment in our portfolio. >> reporter: this month the teacher fund announced it would dump any gun and ammunition holdings that are illegal in california. the nra says all these efforts are "trying to drive a stake through the heart of the second amendment by bankrupting gun companies. but will any of public pressure matter? >> what happened since the newton shooting is sales have
12:49pm
explod exploded. record sales in earnings. >> reporter: rich profit margins and huge sales and shares of smith and wesson are up 8%. but pension funds are big investors and analysts concede if the pressure continues, it could cap share prices. so pressure on share prices yet, but a threat to their business, probably not. the analysts we talked to said the publicly traded gun companies are rolling in so much cash with profit margins in excess of 20%, they don't really require capital from outside investors to stay in business. joining me to talk more about guns and the business of firearms is richard feldman, president of the independent firearms association and former nra lobbyist. just the idea that the public want to put pressures, do you think they have any chance? >> well, i can't tell anyone what to do with their own money. but when you see the mayors
12:50pm
acting as economic terrorists, saying that you shouldn't invest in lawful companies, the outcome is going to be insignificant. if the banks were to fall for this kind of economic terrorism, two can play that game. >> why do you think rahm emanuel and mayor nutter, why do you think they're economic terrorists? >> well, by saying that they're not going to allow pension funds or money invested in banks that loan money to legitimate businesses here in the united states, two can play that game. there's far more money in those banks owned by gun owners in this country than by controlled by the mayors. it would be very careful if i were those banks in thinking if you're going to fall for that kind of a threat because many people can play that game. >> they do think that this and many of these mayors and many pension fund managers and
12:51pm
people, their responsibility is managing the money for retirees, public sector retirees. they say that they think there's going to be more pressure on the gun company's bottom line. regulatory pressure on the companies and even as an investment point of view, put aside the moral question. as an investment point of view, get out of that, get out of the way, you don't agree. >> well, if you're investing to make money, doesn't make much to see what is going on in the firearm industry at the moment. if the rest rest of our economy like firearms, we wouldn't be worried about a debt. >> let's talk about the president's stricter push for gun laws. it's facing an uncertain push in congress. >> my suspicion is, we're seeing more bipartisan discussion on the immigration issue. then on the gun issue. >> so it's not clear that legislation can pass, but you pointed out the gun companies are making a ton of money, and you're seeing a run on the guns in stores.
12:52pm
what's driving it? >> american consumers are putting their money where they're ultimately going to be voting. they're in favor of guns. look at the favorability of the national rifle association. it's in the 50s, the congress is around 10%. i know which way i would rather be. >> let me tell you this. something that could really hurt gun companies is lawsuits. if you are a company, and you have a product that product hurts someone, usually you get sued over it, this industry is protected by law from most liability claims. what should the gun industry, why does it have this special kind of immunity that virtually no other industry gets. you are a lobbyist for the industry, you know better than anybody. why is the product of a gun maker protected when other products reason the? >> guns are capable of great
12:53pm
lethality. when they're in the hands of law everyone forcement or a civilian protecting themselves, we applaud it. when they're in the hands of a deranged individual, it's a horrible tragedy. the gun manufacturer's make a product that is supposed to operate correctly. when it operates correctly in the good guys hands, that's great. when it's in the wrong hands, it's horrible. our focus in this country must be to zero in on whose hands are the guns. >> i know you've spoken a lot about that you've been at the table with the vice president and others on this debate. we'll talk to you again very soon. richard feldman, president of the independent firearms association, thank you, sir, have a nice weekend. >> thank you. up next, tight ends and highrollers aren't the only ones who could cash in on this year's super bowl. that is if you believe in an old market superstition. we'll explain next.
12:54pm
all right that's a fifth-floor problem... ok. not in my house! ha ha ha! ha ha ha! no no no! not today! ha ha ha! ha ha ha! jimmy how happy are folks who save hundreds of dollars switching to geico? happier than dikembe mutumbo blocking a shot. get happy. get geico. fifteen minutes could save you fifteen percent or more. officewith an online package new colincluding: domain name,y! website builder with five pages and basic email just $49.99! that's up to 76 percent below online providers and only at officemax stores!
12:55pm
then you're going to love this. right now they're only $14.95! wow-a grt deal just got a whole lot better. hurry. $14.95 won't last.
12:56pm
wow-a grt deal just got a whole lot better. i have obligations. cute tobligations, but obligations.g. i need to rethink the core of my portfolio. what i really need is sleep. introducing the ishares core, building blocks for the heart of your portfolio. find out why 9 out of 10 large professional investors choose ishares for their etfs. ishares by blackrock. call 1-800-ishares for a prospectus which includes
12:57pm
investment objectives, risks, charges and expenses. read and consider it carefully before investing. risk includes possible loss of principal. the cost of your super bowl party is going up. last summer's drought caused the price of beef, chicken, dairy to rise. that won't stop americans from downing 30 million pounds of snack food and 1.2 billion
12:58pm
chicken wings sunday night. in all, americans are expected to spend $12.4 billion on food, decorations and even new tv's for the big game. alison follows the money as we get ready for some football. >> we're here at beckett's bar and grill in new york city where they're getting ready for the super bowl. did you know the super bowl has turned into quite the american holiday? americans will wind up spending more than $12 billion on game day. most of that will be spent on food. just on sunday we're expected to eat 30 million pounds of snack food. we'll drink 50 million cases of beer and chew on 1.2 billion chicken wings even though the price of them is up. >> there's huge demand and the producers, the major producers are producing less chickens. there's a shortage, but it's not like -- again, it's not like consumers are going to be without chicken.
12:59pm
they're going to pay a lot more for it. >> biggest pizza delivery day of the year? >> consumers can relax and not get too stressed out. the cheese prices are up, and that's a major component to pizza. the drought last summer is just starting to take effect. prices are really starting to rise dramatically. >> what is it about food in general? >> i think it has a lot to do with finger foods. that's where most of the activity happens. pizza, chicken wings, beers. it's all about grabbing and eating. >> like animals? >> exactly. it all goes together. >> here's another thing we'll be buying more of, tv's, but we're going to be getting a bargain. tv prices fell last year and are expected to fall even more this year. the price of what you watch on tv is another story. $3.8 million for 30 seconds of ad time. is there really a way to track the rate of return on those millions of dol